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products and services pass through multiple organizations before they get to you. These
organizations are called intermediaries (or middlemen or resellers).
Companies partner with intermediaries not because they necessarily want to (ideally they could sell
their products straight to users) but because the intermediaries can help them sell the products
better than they could working alone. In other words, they have some sort of capabilities the
producer needs; contact with many customers or the right customers, marketing expertise, shipping
and handling capabilities, and the ability to lend the producer credit are among the types of help a
firm can get by utilizing a channel partner.
Intermediaries also create efficiencies by streamlining the number of transactions an organization
must make, each of which takes time and costs money to conduct. As Figure 8.1 "Using
Intermediaries to Streamline the Number of Transactions" shows, by selling the tractors it makes
through local farm machinery dealers, the farm machinery manufacturer John Deere can streamline
the number of transactions it makes from eight to just two.
Figure 8.1 Using Intermediaries to Streamline the Number of Transactions
The marketing environment is always changing, so what was a great channel or channel partner
yesterday might not be a great channel partner today. Changes in technology, production techniques,
and your customer’s needs mean you have to continually reevaluate your marketing channels and the